AI Liability Insurance
What to expect when you purchase AI Liability Insurance policy
As leading firms plan their initial rollouts of AI solutions—Generative AI or otherwise—they come face to face with the reality that AI liability is uncharted territory. The tech and IT service industry - at least the portions dabbling in AI - are looking for ways to minimize their liability:
- transfer it to others, and
- prevent others from transferring liability to them.
This Harvard and NEJM paper on AI liability insurance (2022) and related work published in the Harvard Journal of Law & Tech (link below) presaged the issues that AI governance teams would have to navigate as they develop AI risk frameworks, policies, and agreements.
Excerpt highlighting 4 key points:
- "the vast majority of businesses with a significant effect on the public will
purchase liability insurance in the long run..." - "To receive insurance compensation, businesses must alter their behavior to
qualify under a no-fault accident compensation scheme." - "businesses will adopt improvements required by their insurers following a “reasonable person” standard."
- "businesses will adjust their activity level to ensure they are
operating in a safe and efficient manner that will enable them to pay for
damages that they may incur under their insurance policy."
For full paper see Insuring AI Harvard Journal of Law & Tech Spring 2022 (PDF)